Early development of railways in the Province of Canada, which consisted of Lower Canada (Quebec) and Upper Canada
(Ontario), was delayed by lack of capital and industrial
infrastructure. The first major national railway development was the
construction of the Grand Trunk Railway of Canada on a gauge of 5 ft 6 in (1,676 mm)
from Portland, Maine to Sarnia, Canada West via Montreal and Toronto,
with a branch from Richmond to Levis near Quebec City. Investment funds
for railways were scarce in the Dominion of Canada because the economy
was mainly agricultural, and most capital was tied up in land. The line
was constructed by the English contractors Peto, Brassey and Betts,
who undertook to raise the capital required in London if they obtained
the contract. As a result of the exorbitant cost of land and charters,
overbuilding stone bridges and stations to English standards, and
initial lack of traffic to support the capital cost....the line was soon
insolvent. This failure together with a severe recession, and the US
Civil War meant that no more capital could be raised and almost no
railways were built in Canada during the 1860s.

There was a return of confidence with the Confederation of the British North American colonies into the Dominion of Canada
in 1867, and the political promise of a transcontinental railway to the
Pacific. Merchants, industrialists, and politicians of Toronto, Ontario
and surrounding counties began to look for ways of opening up the back
country 'bush' north of the city to settlement and trade. Lakes and
rivers had been the principal means of transportation but they were
frozen and unusable for 4–5 months of the year. Road construction was
primitive, trees were cut down and laid side by side in swamps to form
'corduroy' roads. Most roads were passable in Winter (hard frozen) and
Summer (hard baked) but impassable mud troughs in Spring and Fall.
Railways were essential, but how were they to be built cheaply enough to
serve such wild unsettled country?[1]